VANCOUVER (miningweekly.com) – The TSX-V-listed stock of Corsa Coal rallied as much as 23% on Friday following a company announcement calling for a much stronger metallurgical coal production outlook in 2018 and an overall increase in premium low volatile metallurgical coal sales.

“In 2018, Corsa is guiding towards metallurgical coal production growth of over 60% and an overall increase in premium low volatile metallurgical coal sales of over 50% as compared to 2017 forecasted levels,” CEO George Dethlefsen said in a statement.

The Canonsburg, Pennsylvania-based miner said it will continue to allocate free cash flow to its investment projects, focused on growing production from existing mines, a new development project and allocating maintenance capital at existing operations and maintaining its preparation plants to support the goal of doubling low volatile metallurgical coal production over the next two years.

The miner, which produces coal from six mines, has one development mine and operates three preparation plants, has weathered the unprecedented price downturn without needing bankruptcy protection and is now poised to double metallurgical (met) coal sales over the next two-and-a-half years.

Corsa expects company wide met coal sales of between 2.1-million tons to 2.8-million tons, of which it expects to produce 1.2-million to 1.4-million tons, and buy the balance through its value-added services and sales and trading platform.

Corsa advised that 57% of the expected output has already been committed at the midpoint, with 27% of that committed and priced at the midpoint. Eighty-one per cent of met coal sales are destined for export markets.

The 2018 budget is focused on mine development, preparing our operations for higher volumes and upgrading equipment to help lower operating costs in 2018 and beyond. Production growth is expected to assist in Corsa achieving the benefits of scale, which in turn, will help lower its all-in sustaining cost structure through fixed cost absorption.

The company expects to benefit from increased output from a full run rate at the Acosta mine, contribution from two new surface mines and production from the Horning mine beginning in the first quarter.

Further to recording strong income from Corsa's value-added services purchased coal segment, Corsa also expects to generate $4-million to $6-million of additional income in 2018 through toll washing, the sale of mining and coal processing by-products and from mineral royalties.

In 2017, Corsa launched its sales and trading platform. Corsa's metallurgical coal sales have tripled in 2017 and sales revenues are up 247% year to date through to September 30.

The sales and trading segment provides significant intangible benefits that help the company drive volume growth and increase its presence in the seaborne market, as well as in the domestic purchased coal market. This helps the company offer its customers a wide range of coal qualities and creates a margin stream that Corsa believes will be available in any pricing environment.

Corsa’s equity reached an intraday high of C$1.70 a share, and the last trade of the day still saw the equity up some 17.39% at a bid price of C$1.62 apiece.